In today’s article, you will learn more about crowdfunding in South Africa. You will get to know the best platforms to host your event and later, we will discuss tips you can implement to make your campaign a success.
Table of Contents
What is crowdfunding?
Crowdfunding is an alternative form of funding that allows people to donate money to a project or individual in order to support their efforts.
This form of raising funds has been popularized over the last decade with the rise of online crowdfunding platforms such as Kickstarter, Indiegogo, and GoFundMe (more on this later).
Crowdfunding in South Africa is a way for individuals, groups, and companies to raise funds for projects ranging from business ideas, creative works, and personal causes.
How crowdfunding work in South Africa?
The crowdfunding model has been around for some time now, but it is still relatively new to the world of business.
As mentioned earlier, crowdfunding is a way to raise money from a large number of people and give them rewards in return.
It can be used by anyone who needs money and doesn’t want to rely on traditional banks or investors. The crowdfunding model has opened doors for people all over the world, including artists, inventors, and entrepreneurs.
The basic idea behind crowdfunding in South Africa is that people donate money in exchange for rewards.
For example, if someone wants to make a movie about their life story and gives R150 as a donation, they will receive tickets to see the movie when it’s released along with an exclusive T-shirt or poster from the production company.
Most crowdfunding platforms in South Africa require you to set a financial goal for your campaign, as well as a timeframe in which to reach that goal. Some will let you keep all of the money raised during a campaign, whether or not you meet your goal.
Types of Crowdfunding Campaigns
The three types of crowdfunding campaigns are business, personal, and cause-related.
- Businesses use crowdfunding as a way to raise money in order to expand their business operations or fulfill a specific need.
- Personal fundraisers use crowdfunding as a means of funding personal life goals such as medical bills, education costs, or emergency expenses.
- Cause-related campaigns are used by non-profit organizations or charities who want to raise money for specific causes such as the arts, animal welfare, disaster relief, and more.
Crowdfunding has become increasingly popular in South Africa due to the many advantages it offers over traditional fundraising methods, including low cost, ease of use, and flexible accountability.
Crowdfunding benefits in South Africa
Crowdfunding has become a popular way for people to raise money for their projects.
a). Crowdfunding helps validates your ideas
Crowdfunding in South Africa is a form of alternative financing in which a large number of people support an idea, project, or product. If a project is successfully funded then the creator will receive the money to produce their project. The creator has complete control over the process and how they want it done.
b). Crowdfunding helps build a following
Crowdfunding is quickly becoming one of the most popular ways to raise funds for your project. There are many benefits to crowdfunding, such as being able to connect with your audience and build a loyal following before you launch your project.
c). Crowdfunding is a source of flexible funding
Crowdfunding has become a popular source of flexible financing for creative projects, from start-ups to established businesses to artistic endeavors. Crowdfunding enables individuals and groups to gain support from strangers and complete their projects by raising funds online.
How to start a crowdfunding campaign in South Africa
As we have mentioned, crowdfunding in South Africa has become a popular way to raise money for your own project, but it can be difficult to start. If you are considering crowdfunding, the following steps can help you get started.
a). Research the market:
Before launching your campaign, you should research the market and find out what people are looking for in a crowdfunding campaign. You should also do some brainstorming on what your campaign will be about and how it will help people.
b). Create a strong video:
People need to know exactly what they’re getting into when they donate their money to your campaign. This is why it’s important that you create a strong video that will explain everything about your project and how it will make people’s lives better.
c). Plan your campaign:
Marketing is the most important element of a successful crowdfunding campaign. A lot of people find crowdfunding to be an effective marketing strategy, but they often underestimate the work that goes into it. If you want your campaign to be successful, plan your marketing efforts well in advance and set clear goals for yourself.
d). Market and promote your crowdfunding campaign
Crowdfunding is a popular way to raise money for a cause or business. It is often used by entrepreneurs and other people who want to start a project, but don’t have the capital they need to invest.
There are two ways to market your crowdfunding campaign:
- Online marketing – This includes social media, search engine optimization (SEO), and content marketing.
- Offline marketing – This includes email campaigns, direct mail, print ads, and billboards.
Which Crowdfunding Platform is Right for Your App or Product?
This is a question that many ask themselves in South Africa. There are so many crowdfunding platforms out there, each with its own unique features.
We’ve compiled a list of the top 5 crowdfunding platforms that you should consider when designing your campaign.
a). Indiegogo
The first crowdfunding platform on our list is Indiegogo. Indiegogo is an online crowdfunding platform that allows users to create a campaign for a product or project and raise funds for that project using the site’s credit card processing.
Indiegogo was founded in 2007 by Danae Ringelmann, Slava Rubin, and Eric Schell and has raised over $1.2 billion for more than 50,000 campaigns from over 200 countries.
It has helped fund more than 18,000 companies and organizations across the world – including movies, music, technology, and design projects.
Indiegogo’s mission is to democratize access to capital for entrepreneurs around the world by providing them with the resources they need to launch their ideas into reality.
b). Kickstarter
Kickstarter is another global crowdfunding platform for creative projects. It has helped more than 4.2 million people raise $3.7 billion since its launch in 2009.
It is a platform that helps people start their own creative projects and get the funding they need to make them happen. It offers creators a way to take their ideas from concept to reality and gives backers an opportunity to help support projects they believe in and help creators make their dreams come true.
Kickstarter was founded by Perry Chen, Yancey Strickler, Charles Adler, and Slava Rubin in 2009 with the idea of helping artists get their work off the ground by providing them with an easy way of raising funds for their projects.
c). Patreon
Patreon is a platform that allows artists, musicians, and other creative people to receive funding directly from their fans.
Patreon is a new way for artists to make money online in South Africa. It’s different from Kickstarter because it doesn’t ask for a specific goal or timeframe but rather asks if you want to make money on the Internet.
It’s also different from other crowdfunding platforms because it doesn’t take any upfront fees or give rewards in exchange for donations.
In fact, Patreon was founded by Jack Conte in 2013 with the goal of providing an alternative revenue stream for artists and creatives. The platform has over 10 million active users today who have pledged over $500 million to the platform.
d). GoFundMe
GoFundMe is another crowdfunding platform in South Africa that helps people raise money for personal or charitable causes.
This website allows users to create and share personal fundraising campaigns. The site also provides tools to help users create and manage their campaigns, including the ability to track donations, email recipients, and send out thank-you notes.
The site was founded in 2010 by Brad Damphousse, Rob Solomon, and Andrew Ballester.
What makes GoFundMe different from other crowdfunding websites?
The most significant difference between GoFundMe and other crowdfunding websites is the way that they collect donations. Unlike other websites, GoFundMe charges a 5% fee, which means that the company retains all of the funds collected through their website, instead of giving it to the person who initiated the campaign.
Key success factors for your crowdfunding campaign
Successful crowdfunding campaigns in South Africa start with an idea and a plan. It is important to know what you are trying to do and how it will benefit the people who are backing your project.
The key success factors for any crowdfunding campaign include:
- Have a clear goal that is achievable – It is important to have a clear goal and stick to it.
- Create an engaging story that will make people want to back you
- Prepare for all potential outcomes, including failure. Failure can be an essential and necessary part of success. The key to success is learning from your mistakes, not just making them. What could possibly go wrong?